Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at QuidelOrtho (NASDAQ: QDEL) and the best and worst performers in the medical devices & supplies - imaging, diagnostics industry.
The medical devices and supplies industry, particularly those specializing in imaging and diagnostics, operates with a comparatively stable yet capital-intensive business model. Companies in this space benefit from consistent demand driven by the essential nature of diagnostic tools in patient care, as well as recurring revenue streams from consumables, service contracts, and equipment maintenance. However, the industry faces challenges such as significant upfront development costs, stringent regulatory requirements, and pricing pressures from hospitals and healthcare systems, which are increasingly focused on cost containment. Looking ahead, the industry should enjoy tailwinds from advancements in technology, including the integration of artificial intelligence to enhance diagnostic accuracy and workflow efficiency, as well as rising demand for imaging solutions driven by aging populations. On the other hand, headwinds could arise from a rethinking of healthcare costs potentially resulting in reimbursement cuts and slower capital equipment purchasing. Additionally, cybersecurity concerns surrounding connected medical devices could introduce new risks and complexities for manufacturers.
The 4 medical devices & supplies - imaging, diagnostics stocks we track reported a mixed Q2. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
While some medical devices & supplies - imaging, diagnostics stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.5% since the latest earnings results.
QuidelOrtho (NASDAQ: QDEL)
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
QuidelOrtho reported revenues of $613.9 million, down 3.6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ full-year EPS guidance estimates and a slight miss of analysts’ constant currency revenue estimates.
"Our second quarter results demonstrate our continuing commitment to commercial and operational execution," said Brian J. Blaser, President and Chief Executive Officer, QuidelOrtho.
Interestingly, the stock is up 17.6% since reporting and currently trades at $27.87.
Read our full report on QuidelOrtho here, it’s free.
Best Q2: GE HealthCare (NASDAQ: GEHC)
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ: GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
GE HealthCare reported revenues of $5.01 billion, up 3.5% year on year, outperforming analysts’ expectations by 1%. The business had a very strong quarter with an impressive beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.
GE HealthCare delivered the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3.8% since reporting. It currently trades at $74.85.
Is now the time to buy GE HealthCare? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Lantheus (NASDAQ: LNTH)
Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.
Lantheus reported revenues of $378 million, down 4.1% year on year, falling short of analysts’ expectations by 2.5%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ full-year EPS guidance estimates.
Lantheus delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 29% since the results and currently trades at $51.54.
Read our full analysis of Lantheus’s results here.
Hologic (NASDAQ: HOLX)
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ: HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Hologic reported revenues of $1.02 billion, up 1.2% year on year. This print surpassed analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EPS guidance for next quarter estimates and a narrow beat of analysts’ constant currency revenue estimates.
Hologic delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 5.1% since reporting and currently trades at $68.30.
Read our full, actionable report on Hologic here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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